The Federal No Surprises Act (42 USC §300gg-111 et seq.), effective for plan years beginning January 1, 2022, restricts surprise bills for patients with job-based or individual health care coverage who receive: (a) emergency care from nonparticipating (out-of-network) providers or facilities; or (b) nonemergency care from nonparticipating health care providers at certain participating facilities.[1] Interim Final Rules issued in July and September, 2021 implement these provisions (45 CFR Part 149).

Simply put, a “surprise bill” is an unexpected bill for medical services received by an individual for the difference between the billed charge and the amount paid by the individual’s health plan or insurance.

Individual health care providers in Connecticut have had to comply with the state’s surprise billing law (CGS §38a-477aa) since 2016, but the federal legislation imposes new requirements. And since the state law only regulates individual health care coverage and fully-insured group health care coverage, the new federal law will have greater reach as it also applies to self-insured employee health plans.

Read on for 10 key aspects of the new federal law:

1. Restrictions on balance billing for nonemergency services rendered by nonparticipating providers at participating health care facilities (including hospitals, hospital outpatient departments, critical access hospitals and ambulatory surgical centers).[2] An individual may waive the balance billing protections for such services, but only after he/she: (a) receives a written notice that includes detailed information designed to ensure that he/she knowingly accepts the out-of-pocket charges for care; (b) acknowledges receipt of the information in the notice; and (c) consents to waive the balance billing protections. Providers and facilities must use the standard notice provided by the U.S. Department of Health and Human Services.[3]
2. Restrictions on balance billing for emergency services furnished by nonparticipating providers or nonparticipating emergency facilities [4] (with an exception for post-stabilization services). The No Surprises Act limits cost sharing for out-of-network emergency services to amounts similar to in-network levels and requires that such cost sharing count toward in-network deductibles and out-of-pocket maximums. Certain post-stabilization services are considered emergency services subject to the prohibition on balance billing; however, the No Surprises Act permits balance billing for such post-stabilization services if the notice and consent requirements described above are met and the patient meets certain standards (e.g., the patient can travel using non-medical transport and is in a condition to receive the notice and provide the consent).
3. Exceptions to the notice and consent rule. Notice and consent is never available (and therefore balance billing is never permitted) for the following situations: (a) emergency services as described above; (b) certain ancillary services (including items and services related to emergency medicine, anesthesiology, pathology and radiology); items/services provided by assistant surgeons, hospitalists and intensivists; diagnostic services; and items/services provided by a nonparticipating provider if there is no participating provider who can furnish such item or service at the facility; and (c) items or services furnished as a result of unforeseen, urgent medical needs that arise at the time an item or service is furnished– regardless of whether the notice and consent criteria have been met. 
4. Neither the No Surprises Act nor the implementing regulations universally protect individuals from every high or unexpected medical bill. An individual enrolled in a plan that provides no coverage for his/her particular health care condition or the items and services necessary to treat that condition may be subject to balance billing.
5. New disclosure requirements regarding the prohibition on balance billing. Providers and facilities must provide information regarding federal balance billing protections (and applicable state law protections against balance billing) and how to report violations. The information must be provided to insured individuals and displayed on signs in provider offices and facilities and posted on public websites. Model notices are available.
6. New requirement to provide a good faith estimate in advance of scheduled services. Health care providers and facilities must inquire within specific timeframes if an individual who schedules an item or service is enrolled in health insurance and whether the individual will submit a claim to his/her insurer. If so, the provider or facility must provide a good faith estimate of the expected charges and expected billing and diagnostic codes to the insurer. A good faith estimate must also be provided to insured patients who do not intend submit a claim, as well as to patients who are uninsured or self-pay.
7. New continuity of care requirements when a provider’s network status changes. When the contractual relationship between a health care provider or facility and an insurer ends or benefits are terminated, providers and facilities must: (a) accept payment from the insurer (and cost-sharing payments) for a “continuing care patient” at the previously agreed-to payment amount for up to 90 days after the date on which the insurer notified the patient of the change in benefits; and (b) continue to adhere to all policies, procedures and quality standards imposed by the insurer for such items or services as if the contract were still in place for such period. “Continuing care patients” include patients with serious and complex health conditions, patients scheduled for nonelective surgery, pregnant women and terminally ill patients.
8. New provider directory requirements, including provisions for reimbursing enrollees for errors. Providers and facilities must have in place business processes to ensure the timely provision of provider directory information to health insurers. If an enrollee pays a bill in reliance on incorrect provider network information, the provider/facility must reimburse the enrollee for the full amount paid in excess of the in-network cost-sharing amount, plus interest. Providers/facilities may require that their contracts with insurers impose financial responsibility on the insurers for providing inaccurate network status information to an enrollee.
9. New dispute resolution processes in place for providers and insurers.[5]  A new federal independent dispute resolution process has been established that nonparticipating providers/facilities and insurers may use to determine the out-of-network rate for items or services for which balance billing is prohibited.[6]
10. Penalties for violations. In instances where a provider or facility balance bills in violation of the statute and the Interim Final Rules, HHS may impose civil monetary penalties (up to $10,000 per violation). There are exceptions, including if the provider/facility does not knowingly violate the law and timely reimburses the health plan or individual, as applicable, with interest.

A Word About Connecticut Law

Connecticut enacted its own prohibition against surprise billing effective July 1, 2016. The law only regulates individual health care coverage and fully-insured group health care coverage. In particular:

• If an insured receives a surprise bill for nonemergency services, he/she is only required to pay the out-of-pocket expense that would apply if the services had been rendered by an in-network provider. A health carrier must reimburse an out-of-network provider or insured, as applicable, for the services at the in-network rate under the plan as payment in full, unless the carrier and provider agree otherwise.

• With respect to emergency services rendered to an insured by an out-of-network health care provider, health carriers may not impose on the patient an out-of-pocket expense that is greater than the out-of-pocket expense that would be imposed if such emergency services were rendered by an in-network provider. The health care provider may bill the health carrier directly and the health carrier must reimburse the health care provider the greatest of the following amounts: (a) the amount the insured’s health care plan would pay for such services if rendered by an in-network health care provider; (b) the usual, customary and reasonable rate for such services; or (c) the amount Medicare would reimburse for such services.

• A bill is not a surprise bill if an in-network provider is available, but the insured knowingly elects to receive services from an out-of-network provider. A patient who provides consent to nonemergency services as allowed by the federal No Surprises Act almost certainly would be deemed to have “knowingly” elected to receive the services under state law.

• It is an unfair trade practice for an individual provider to request payment (other than a deductible, copay, co-insurance or other out-of-pocket expense) for health care services or a facility fee covered under a plan, emergency services covered by a plan and rendered by an out-of-network provider or a surprise bill.

[1] The new law also regulates providers of air ambulance services; a summary of how the new law affects these providers can be found at this link.

[2]  The term “participating provider” generally means, with respect to an item or service and a group health plan or group or individual health insurance coverage offered by a health insurance issuer, a physician or other provider having a contractual relationship with a group health plan or group or individual health insurance issuer for furnishing an item or service under the plan or coverage, respectively. The term “participating health care facility” means, with respect to an item or service and a group health plan or health insurance issuer offering group or individual health insurance coverage, a health care facility (defined below) that has a direct or indirect contractual relationship with the plan or issuer, respectively, with respect to the furnishing of such an item or service at the facility. The Act identifies the term “health care facility” in this manner:

A health care facility described in this clause, with respect to a group health plan or group or individual health insurance coverage, is each of the following:

(I) A hospital (as defined in 1861(e) of the Social Security Act [42 U.S.C. 1395x(e)]).

(II) A hospital outpatient department.

(III) A critical access hospital (as defined in section 1861(mm)(1) of such Act [42 U.S.C. 1395x(mm)(1)]).

(IV) An ambulatory surgical center described in section 1833(i)(1)(A) of such Act [42 U.S.C. 1395l(i)(1)(A)].

(V) Any other facility, specified by the Secretary [of Health and Human Services], that provides items or services for which coverage is provided under the plan or coverage, respectively. (42 USC 300gg-111).

[3] These documents may not be modified by providers or facilities, except as indicated or as may be necessary to reflect applicable state law.

[4]   A “nonparticipating emergency facility” means, with respect to an item or service and a group health plan or group or individual health insurance coverage offered by a health insurance issuer, an emergency department of a hospital, or an independent freestanding emergency department, that does not have a contractual relationship directly or indirectly with the plan or issuer, respectively, for furnishing such item or service under the plan or coverage, respectively. (42 USC 300gg-111(a)(3)(F)(i)).

[5] On December 9, 2021, the American Hospital Association, American Medical Association and others sued the federal government over the implementation of the dispute resolution process.

[6] As noted below, Connecticut law specifies how much health carriers must be reimbursed for surprise bills and out-of-network emergency services, so the federal dispute resolution process is likely to come into play in Connecticut in situations where the patient is covered by an employer’s self-insured plan, since self-insured plans are not regulated by state law.

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